Asia Pacific hotel deals hit $3.8B in H1 – JLL

HOTEL transaction volumes in the Asia Pacific region grew by 13.2 percent to $3.8 billion in the first half, with Japan accounting for the bulk of the transaction volumes, real estate services group Jones Lang Lasalle said in report.

JLL attributed the rise in hotel transaction volumes to growing international and domestic travel into the region, especially in first tier cities.

Japan accounted for $2.1 billion worth of transactions, followed by Australia with $278 million and Mainland China with $252.6 million. Fourth was Vietnam with $237.6 million, then Taiwan with $217.6 million and Thailand with $138.3 million.

The report said some 14,025 room keys were traded across the Asia Pacific region in the first half compared to 10,976 room keys in the same period last year.

The average price per key across Asia Pacific dropped by 2.2 percent to $289k per key, it said.

JLL recorded 59 single-asset transactions in the Asia Pacific in the first half, with the top 10 deals amounting to almost $1.7 billion.

“Japan lent considerable weight to the rankings representing five out of the top 10 deals transacted during H1 2016,” the report said.

It said domestic investors dominated hotel transactions in the region, accounting for 80 percent of all deals above a million.

“Australasia continues to attract the highest capital inflows with cross border investors emerging as the dominant purchasers of hotel real estate over the recent years. Asian buyers are increasingly attracted by higher property yields and the safe haven of proven investment markets abroad,” JLL said.

JLL added that investors are starting to expand their focus to second tier cities.

“Despite the relatively sharp pricing in first tier cities, there remains significant appetite from investors for deals in markets with strong domestic and international visitation fundamentals,” the report said.